Inflation will probably reach 14 percent this year, while
the budget deficit will be 2 percent of gross domestic product,
Erste predicted.

This year will be “especially difficult” for the economy,
analyst Igor Zholonkivskyi wrote today in an e-mailed note from
Kiev, the capital. Difficulties in the steel industry are
“piling up, pressure on the hryvnia is increasing and foreign
liquidity is worsening.”

Ukraine’s government plans to boost domestic consumption to
spur economic growth as global demand declines for metals, the
former Soviet republic’s primary export. GDP shrank 1.3 percent
from a year earlier in the third quarter, with industrial
production plunging 7.6 percent in December.